The CPA – definitions

Private Property South Africa
Ismael Laher

The Consumer Protection Act (CPA) applies to all transactions involving the supply of goods or the provision of services by a person in the ordinary of business in exchange for some form of consideration, for example, payment in cash or by exchange.

Immoveable property falls under the definition of goods. The term “goods” includes a legal interest (eg: ownership) in land or any other immovable property, unless that legal interest falls within the definition of services which deal with letting, for instance. The sale of immoveable property is considered as the sale of goods and so is governed by the CPA.

Despite including immovable property under the definition of goods, the CPA will not impact on private sales by ordinary homeowners. The CPA only applies to transactions in the ordinary course of business and so will exclude private sales – sales that are not in the ordinary course of business. In other words, a transaction involving a person selling their home will not be governed by the CPA if that sale is not in the ordinary course of the business of the home owner.

However, the term “ordinary course of business” will not only result in the CPA impacting on the sale of property by developers and people whose sole business is the property industry. The term “ordinary course of business” is broadly framed and will result in the CPA expanding to transactions involving people who buy property for the purpose of selling the property. These people are often employed full-time but also buy and sell property on the side. They do not devote the majority of their time to this business but continually buy property solely for on-selling. It could be that, although these people have other jobs, the sale of property by such a person will be done in the ordinary course of business.

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